Seven unidentified crypto firms have been issued cease and desist orders by Dubai’s Virtual Assets Regulatory Authority (VARA). VARA has also imposed hefty fines ranging from $13,600 to $27,200 on the unlicensed crypto firms in Dubai as the regulator continues to maintain a secure and regulated digital asset environment.
The digital assets regulator’s October 9, 2024, action stated that the firms had violated marketing rules and operated without valid authorization. Despite not naming the companies under sanction, VARA urged the public to only deal with licensed crypto firms to avoid potential legal, reputational, and financial risks. In the statement, the regulator’s CEO, Matthew White, asked the companies to “immediately cease all activities and desist from undertaking any marketing or advertising of virtual asset services.”
VARA Doesn’t Tolerate Non-Compliance
VARA has become popular among the investing population for its marketing regulations that promote consumer protection and transparency. The regulations mean that any firm that seeks to operate in the UAE has to adhere to the high standards of integrity to be allowed to continue with their businesses. Going after the unlicensed crypto firms in Dubai, the regulator is sending a string of warnings that it will not tolerate non-compliance regarding crypto-related activities.
There’s every chance that VARA’s proactive approach could help create a secure environment where investors can do business with confidence. The crackdown on the defiant unlicensed crypto firms in Dubai comes hot on the heels of the regulator’s efforts to ensure that crypto marketing firms play according to the roles and regulations laid down. VARA warned crypto marketing companies last September to ensure they added a well-displayed disclaimer to all their promotional materials. Additionally, entities promoting crypto products were advised to state clearly the possibility of crypto assets losing their value without notice due to market volatility.
A Leading Crypto Hub
As cryptocurrencies head towards mainstream adoption as 2024 approaches, a study by Social Capital Markets showed that Dubai had joined South Korea and Switzerland as leading destinations for crypto-based businesses. This has been as a result of the authorities in those countries playing an active and clear role in encouraging fairness within the blockchain enterprise.
The researchers focused on different factors, including the countries’ tax policies, regulatory frameworks, and overall business environment in relation to crypto-based businesses. In addition to the top three, the other countries making great strides in crypto are Singapore, Portugal, and the United States, where many businesses currently accept crypto payments.
According to the report, Dubai was named a leading destination and scored 79 out of 100 points. The report added that the city’s impressive scores were on account of clarity in their regulations, no capital gain tax, and an attractive corporate tax for incomes above $100,000. Moreover, Dubai also offered affordable licensing fees that made it attractive for companies seeking to expand their horizons without spending more than necessary, especially when entering a new region. The study indicated the presence of over 550 registered companies offering crypto services within the city, with giants like Bybit and Binance being the latest entrants in 2024.
Conclusion
Many players within the crypto industry could see the cease and desist orders from the watchdog as a rare occurrence because the region is putting its best foot forward to project the city as a leading crypto hub. VARA has recently been in the news after entirely licensing leading crypto exchanges like Binance, OKX, and Crypto.com.
The UAE has also won the hearts of many digital asset enthusiasts by exempting crypto-based transactions from paying Value Added Tax (VAT). Last August, a Dubai-based court was also seen to be lenient towards an institution that settled a worker compensation legal matter with a crypto payment.
